Paeoniflorin (PF), extracted from the root of Paeonia lactiflora Pall, exhibits anti-inflammatory properties in several autoimmune diseases. Osteoclast, the only somatic cell with bone resorbing capacity, was the direct cause of bone destruction in rheumatoid arthritis (RA) and its mouse model, collagen-induced arthritis (CIA). The objective of this study was to estimate the effect of PF on CIA mice, and explore the mechanism of PF in bone destruction. We demonstrated that PF treatment significantly ameliorated CIA through inflammatory response inhibition and bone destruction suppression. Furthermore, PF treatment markedly decreased osteoclast number through the altered RANKL/RANK/OPG ratio and inflammatory cytokines profile. Consistently, we found that osteoclast differentiation was significantly inhibited by PF through down-regulation of nuclear factor-κB activation in vitro. Moreover, we found that PF suppressed nuclear factor-κB activation by decreasing its translocation to the nucleus in osteoclast precursor cells. Taken together, our new findings provide insights into a novel function of PF in osteoclastogenesis and demonstrate that PF would be a new therapeutic modality as a natural agent for RA treatment and other autoimmune conditions with bone erosion.